The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:15 a.m., on Wednesday, May 19, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator William J. Raggio, Chairman

Senator Raymond D. Rawson, Vice Chairman

Senator Lawrence E. Jacobsen

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

Senator Bob Coffin

Senator Bernice Mathews

STAFF MEMBERS PRESENT:

Birgit Baker, Program Analyst

Lorne J. Malkiewich, Director

Allan M. Smith, Manager, Information Systems

Judy Jacobs, Committee Secretary

GUEST LEGISLATORS PRESENT:

Assemblyman P.M. "Roy" Neighbors, Assembly District No. 36

Senator Mike McGinness, Central Nevada Senatorial District

Assemblyman David E. Goldwater, Clark County Assembly District No. 10

OTHERS PRESENT:

Rick Bennett, Director of Governmental Relations, University of Nevada, Las Vegas

James Richardson, Ph.D., Lobbyist, Nevada Faculty Alliance

Peter G. Morros, Director, State Department of Conservation and Natural Resources

Carol A. Jackson, Director, Department of Employment, Training and Rehabilitation

Pam Drum, Public Affairs Coordinator, Tahoe Regional Planning Agency

Rochelle Nason, Executive Director, League to Save Lake Tahoe

David Pursell, Executive Director, Department of Taxation

Thomas J. Grady, Lobbyist, Nevada League of Cities & Municipalities

Steven Barr, Lobbyist, Nevada Corrections Association

Senator Raggio opened the hearing on Assembly Bill (A.B.) 38, a bill sponsored by the assemblyman representing Esmeralda, Lincoln, Mineral, and Nye counties.

Assemblyman P.M. "Roy" Neighbors, Assembly District No. 36, testified A.B. 38 will accomplish two things. He explained it will change the Nevada Constitution to provide another judge for the Fifth Judicial District, and it will authorize the Board of County Commissioners to establish one or more locations in which to hold District Court proceedings in addition to the county seat.

Mr. Neighbors noted the bill was requested by District Judge John P. Davis and has been supported by resolutions from the town of Pahrump and from Mineral, Nye, and Esmeralda Counties, which comprise the Fifth Judicial District as depicted on a map he provided (Exhibit C). He surmised the request has come about as a result of a population explosion in the Pahrump area and the growing workload placed upon the district judge. He handed out a list showing the population and number of civil filings in each judicial district (Exhibit D), and letters from the Board of County Commissioners of Nye County (Exhibit E) and the chairman of the Pahrump Town Board (Exhibit F) endorsing the request for a new judge. He added that many of the cases involve some of the 30,000 citizens of Pahrump, and the jurors and witnesses are obliged to travel 300 miles to attend court in Tonopah.

Mr. Neighbors acknowledged the judge’s salary is paid by the state, but staff and courtroom expenses are paid by the counties. He explained the various county commissioners hold the belief the fiscal impact may be reduced if the need to pay for overnight stays for jurors or those involved is removed. He said Nye County is building a courtroom in Pahrump to accommodate a new judge.

Mr. Neighbors testified the Nevada Judges’ Association supports A.B. 38. Also, he noted, the bill may allow the addition of courtrooms in Laughlin, Wendover, Jackpot, and Mesquite, which are growing and in which no court proceedings are presently held.

Mr. Neighbors said he has requested statistics on the number of times a district judge has had to travel from one district to another because of a change of venue because of a conflict case. He noted that, too, incurs additional costs.

Referring to the summary of population and civil filings in the judicial districts, Mr. Neighbors pointed out the judge in the Fifth Judicial District conducted court for a population which was 37,770 in 1998 but which he estimates has grown to over 40,000 by now due to the growth in Pahrump.

Senator Raggio agreed the distance the judge must cover is significant. He noted the bill will allow court to be held somewhere other than the county seat for the first time and will open the opportunity to all counties. He wondered whether the location away from the county seat would be used only for the purpose of holding court, or whether it would be used for other judicial business. Mr. Neighbors replied it would save funds to have an office with other facilities, including filing and recording, but he was unsure of how the mechanics of filing, giving notice, or recording would be done.

Senator Mike McGinness, Central Nevada Senatorial District, said A.B. 38 goes hand in hand with a constitutional amendment passed in November that will allow district judges to hold court in places other than the county seat. He opined filings may have to continue to be done in the county seat, but court proceedings could take place in other jurisdictions. He agreed a burden is placed on people from Pahrump who are called to jury duty.

Senator McGinness read two sentences from a letter he had received from Brian Kunzi (Exhibit G), the former district attorney in Mineral County. He read:

Senator McGuinness asserted the letter indicates the importance of A.B. 38. He concurred the caseload is difficult, but he declared the "travel in this district is what really puts the judges to the test."

Mr. Neighbors reviewed the recent ballot question which stated:

Senator Raggio inquired why the bill fails to authorize the Governor to appoint a new judge at this time rather than wait for an election in the year 2000 if the situation is so critical. Mr. Neighbors responded there was concern regarding financing. He said he originally intended that the new district judge be appointed by the Governor and serve until January 1, 2001, but the Assembly Committees on Judiciary and Ways and Means were more comfortable with the amended bill, which delays establishment of the office.

Senator Neal asked whether the sheriff in Pahrump has adequate facilities and staff since he will be responsible for the new courtroom. Mr. Neighbors responded there is a large substation in Pahrump, and the Nye County budget appropriates from $4 million to $6 million to the sheriff countywide.

Senator Raggio requested that Mr. Neighbors ascertain whether or not the various counties, especially Nye County, would endorse the concept if the bill provided for an earlier start-up date for the court with the new judge to be appointed by the Governor prior to the election in 2000.

In the absence of further testimony, Senator Raggio closed the hearing on A.B. 38 and opened the hearing on Assembly Bill (A.B.) 181 in order to accommodate Assemblywoman Leslie.

Assemblywoman Sheila Leslie, Washoe County Assembly District No. 27, testified as a cosponsor of A.B. 181 and on behalf of Assemblywoman Jan Evans, Washoe County Assembly District No. 30, who she noted is recovering from surgery. Ms. Leslie explained a statewide coalition has been working on the issue of adolescent substance abuse, and the Community Unity Coalition, chaired by Senator Randolph J. Townsend, Washoe County Senatorial District No. 4, has endorsed A.B. 181.

Ms. Leslie declared there is a tremendous need for expanded adolescent treatment of substance abuse for youths. She stated a recent study indicates 15.7 percent of adolescents in Washoe County and 12 percent of adolescents in the rest of the state are in need of some form of substance abuse prevention, intervention, or treatment. She explained A.B. 181 will provide residential treatment, outpatient treatment, transitional housing, and comprehensive evaluation of youths needing drug services.

Ms. Leslie added the bill also will move the Bureau of Alcohol and Drug Abuse (BADA) from the Department of Employment, Training and Rehabilitation (DETR) to the Department of Human Resources. She reported Ms. Evans met with the Governor, who indicated approval of the transfer. She said the move should allow better coordination between substance abuse issues and mental health and the Division of Child and Family Services. She noted much of the funding from the federal government links drug treatment with mental health and said A.B. 181 will simplify the process. She stated 35 other states have reorganized their substance abuse programs along similar lines.

Ms. Leslie expressed gratification that the move will also make the state eligible for matching federal dollars for substance abuse which should enable the state to expand the program.

Ms. Leslie said the recommendation for A.B. 181 also came out of the Interim Committee on Juvenile Justice chaired by Ms. Evans.

Ms. Leslie added the bill also creates three pilot projects at Family Resource Centers to offer drug abuse intervention to people where they live. She noted the Family Resource Centers have had many requests for substance abuse treatment, although as yet they have no certified counselors.

Additionally, Ms. Leslie said, A.B. 181 restructures the responsibilities of the Commission on Substance Abuse Education, Prevention, Enforcement and Treatment and offers more policy direction. She noted the composition of the commission is expanded and changed through Senate Bill 346 to better reflect the population of the state.

Ms. Leslie said A.B. 181 will require an accounting of and publicity of the factors relating to substance abuse. She said the study requested $2.6 million in order to treat approximately 5 percent of the youngsters who need treatment in the state. She said $500,000 has been identified by MAXIMUS which will be used to match federal funds through the Department of Human Resources, making another $1 million available each year for substance abuse treatment for youngsters in Nevada.

Senator Raggio noted the appropriation was removed from the original bill, three pilot projects are included under section 37, and section 38 states "human resources shall make available from its existing federal and state funding sources the sum of $158,400" for the pilot projects. He wondered how the entire project is to be funded.

Birgit Baker, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained the agency has indicated that, based on the increase in federal funds, there will be sufficient resources available to fund the pilot projects. She said the $500,000 in funds identified by MAXIMUS are included in the proposed budget.

Senator Neal asked whether the $500,000 would be used to pay for the treatments described under sections 34, 34.5, and 35 of the bill. Senator Raggio said the joint subcommittee decided to close the budget with funding identified from the MAXIMUS study. Ms. Baker interjected the Assembly Committee on Ways and Means closed the BADA budget with the MAXIMUS funding dedicated to adolescent treatment programs, whereas the Senate Committee on Finance decided to hold the budget pending a review of A.B. 181. She indicated the joint subcommittee decided to place the MAXIMUS funds in a Department of Human Resources budget.

Senator Raggio announced further testimony on A.B. 181 would be heard later during the meeting. He opened the hearing on Assembly Bill 527 to accommodate Senator Rawson, who was scheduled to testify in another committee.

Rick Bennett, Director of Governmental Relations, University of Nevada, Las Vegas (UNLV), said UNLV requested the bill and it will apply to bonding primarily at UNLV and the University of Nevada, Reno (UNR). He said UNLV requested that "land" be inserted into the definition of "project" as stated in section 1, line 4. He explained UNLV is considering acquisition of land and buildings beyond the present campus. He said the current language does not make clear whether land would be included in the project or not, and the request was made for clarification.

Mr. Bennett drew attention to lines 4 through 6 on page 2 where other uses of bond funds have been added. He explained projects other than the campus facilities, student housing, and parking facilities are under consideration. He said the university master plan broadens the definition of projects that can be financed with revenue bonds.

Mr. Bennett noted language on lines 18 and 20 on page 2 increases the current authorization of bonding for UNR from $12 million to $25 million, and for UNLV from $17.5 million to $32.5 million. He said the last change is found on line 24 extending the time to issue the bonds from 9 years to 18. He indicated the current statute states the bonds must be issued within 9 years of the effective date of the original 1991 act, which would be the year 2000, and an increase to 18 years will allow issuance of the bonds until the year 2009.

Robert E. Dickens, Ph.D., Director, Office of Governmental Relations, University of Nevada, Reno, testified in support of A.B. 527. He said UNR anticipates using the $25 million for student housing; the payments by the students living there would be used to retire the indebtedness. He stated the authority also will be sufficient to allow UNR to participate in an emerging federal program under the federal Department of Housing and Urban Development (HUD) to allow universities to use the funds not only for housing but also for campus facilities and related activities around the campus. He further stated, "It might be considered as using the institution to engage in some urban redevelopment."

Dr. Dickens added the revenue bonds are covered by the university security law, which is very specific regarding use of revenues that can be pledged in payment of the bonds, and also regarding which revenues cannot be pledged. He noted all projects must be approved by the Board of Regents.

Senator Raggio asked what projects are being proposed if the authority under A.B. 527 is granted. Dr. Dickens replied the university is considering an additional parking garage, acquisition of some land and buildings owned by the Boy Scouts of America that sit within the boundaries of the campus, and land and buildings adjacent to the campus that would not necessarily be used for student housing or parking.

Senator Rawson explained the original bill was developed to allow the university system to use revenue bonds if a dependable revenue stream is available. He recalled dormitories, a cafeteria, and parking lot were first built using revenue bonds.

Senator Rawson introduced two amendments. He read number 9 from the second page of the first proposed amendment (Exhibit H) which he explained would allow the funds received from any dental programs to be used for construction or to guarantee a revenue bond for construction of dental facilities. He drew attention to the bottom of the exhibit page where the $32.5 million appropriation to UNLV is increased to $67.5 million to amend section 2, line 20 on page 2.

The second amendment proposed by Senator Rawson (Exhibit I) allows a different type of bond, he said, to give more flexibility. He related the previous state treasurer called it a "payback general obligation bond," and the bonds will have to be secured by a pledge of revenues derived from or pertaining to the imposition and collection of fees for dental services. He explained subsection 4 provides that any bonds or securities issued pursuant to the section must not be considered as obligations general, special, or otherwise to the state, meaning it will not act against the debt service of the state.

Senator Rawson stated the amendment will open up two bonding methods as possibilities for the dental facilities. He noted the bond counsel will select the most appropriate type of bond when it is time to sell the bonds, and the counsel will have to be able to demonstrate the revenue stream in order to sell the bonds. The amendment will simply provide the authority.

Senator Raggio asked whether Mr. Bennett and Dr. Dickens had any objections to the amendments. Mr. Bennett responded the two had discussed the amendments with Senator Rawson and consider the amendments "friendly." Dr. Dickens voiced agreement.

James Richardson, Ph.D., Lobbyist, Nevada Faculty Alliance, offered support for A.B. 527 and both the amendments on behalf of the alliance.

There was no additional testimony on A.B. 527. Senator Raggio opened the hearing on Assembly Bill 151.

Peter G. Morros, Director, State Department of Conservation and Natural Resources, explained A.B. 151 will make a onetime appropriation for the purpose of increasing the balance in the litigation fund. He requested committee members look at a two-page handout (Exhibit J) giving a history of the activity in the fund, budget account 101-4203. He said the account has primarily been utilized to offset legal expenses associated with lawsuits regarding the Truckee, Carson, and Walker Rivers since 1973. He stated that since 1987 the department has attempted to refrain from making requests every session for funding for the account, and the department has been successful in holding down requests. He noted the last appropriation was in 1995.

Mr. Morros said there are 13 lawsuits pending in federal and state courts on the three river systems, excluding the 2,200 petitions filed in federal court regarding the Newlands Project. He expressed hope some of the litigation will be settled under the provisions of another pending bill, Assembly Bill 380.

Mr. Morros explained expenditures from the fund are limited to the three stream systems for the Truckee, Walker, and Carson Rivers. He anticipates there will be significant activity within the next 2 years regarding some of the lawsuits. He said a federal team was recently appointed to deal with the litigation for the Walker River, and preparations are being made for lengthy depositions not only on the Walker River suit, but also for the so-called recoupment lawsuit on the Carson and Truckee Rivers.

Mr. Morros indicated the department is preparing for expenses to arise in the next 2 years, especially regarding the 2,200 petitions filed with the federal court regarding abandonment and forfeiture of water rights within the Newlands Project. He repeated hope those will be settled under the A.B. 380 proposal.

Senator Raggio asked whether the $200,000 cost has already been incurred as outlined in A.B. 181. Mr. Morros replied no, it is for anticipated costs. He stated, "I get nervous when the fund gets down below $150,000." He said the first of the year it was at $137,000 and it is probably less than that at present.

Senator Raggio asked how many years are represented on Exhibit J. Mr. Morros answered the list starts with 1973 and continues until the present. Senator Neal wondered when the matter will be concluded, but Mr. Morros was unable to estimate when.

Regarding A.B. 380, Senator Raggio acknowledged there is some question as to the source of $4 million that will be required should the bill pass. Mr. Morros clarified the cost will be $13.5 million, but the state’s share will be $4 million.

Senator Raggio reopened the discussion of Assembly Bill 181. Responding to Senator Neal’s questions on sections 34, 34.5, and 35, Ms. Baker noted that is existing law and the sections are to accommodate the transfer of BADA from DETR to the Department of Human Resources. She explained those are existing services that need to be included in the budget as presented in The Executive Budget.

Marilynn Morrical, MSRN, MS, Certified Alcohol and Drug Abuse Counselor; Certified Program Administrator, testified in favor of A.B. 181 and the proposal to move BADA from DETR to the Department of Human Resources. She felt it will make good sense because issues of mental and physical health and welfare often go along with substance abuse treatment.

Ms. Morrical said there have been times in the past when cooperation among the agencies has been difficult as a result of differing views of the issues and differing fiscal and administrative structures. She asserted the move will facilitate cooperation between the various agencies that share patients.

According to Ms. Morrical the support for actual substance abuse prevention and treatment has been limited, as indicated by the fact that the budget for BADA is comparable to what it was in 1992 yet the problem continues to expand and no new funding has been provided.

Ms. Morrical asserted a number of systems could be put in place to increase accountability for the bureau and the programs. She opined it will happen under the new structure within the Department of Human Resources. She said problems have arisen regarding exactly where funds are being spent, and whether funds are being spent efficiently.

Carol A. Jackson, Director, Department of Employment, Training and Rehabilitation, came forward to report the department is not opposed to the move of BADA to the Department of Human Resources. She stated:

Robert Johnston, Acting Chief, Bureau of Alcohol and Drug Abuse, Rehabilitation Division, Department of Employment, Training and Rehabilitation, reported questions were raised regarding the transfer, accountability, and service. He stated that historically BADA has funded programs related to dual diagnoses in mental health issues. He stated there are pilot projects under way at both ends of the state, and he has been actively involved in the restructuring of BADA to ensure systems are in place to increase accountability.

Mr. Johnston said the reorganization became effective on May 1, and the majority of the BADA staff is now housed in the grants management section. This section will be responsible for performing on-site fiscal and programmatic monitoring of all programs to ensure funds are being expended appropriately.

Referring to section 34, Senator Neal asked whether there is a health maintenance organization (HMO) that works with the BADA program. Mr. Johnston replied there is no HMO that specifically works with BADA. He explained section 34 changes the language in other statutes if the bureau is moved from DETR to the Department of Human Resources.

Senator Neal asked how treatment is provided for youngsters. Mr. Johnston said programs or counselors certified by BADA can provide services to adolescents. If the counselor in another agency is certified, he explained, the counselor can provide services even though the agency itself may not be certified.

Ms. Jackson expressed concern regarding the MAXIMUS funding. She said:

Acting as chairman, Senator O’Donnell asked whether Ms. Sylva was present. When told she was, he asked whether she had the amendment; she did not. Senator O’Donnell asked whether any amendments were being offered.

Mark Roberts, Administrative Services Officer IV, Director’s Office, Department of Human Resources, commented the amendment is not for A.B. 181 but there is an amendment being considered to extend the contract with MAXIMUS for next year. He said it has been requested and is being presented to the State Board of Examiners. He explained the $500,000 identified by MAXIMUS is an additional sum being moved into the budget. He stated if initiatives are developed and funds are found, the $500,000 would be an addition to the budget, not a reduction. He explained there is no intention to remove any funds from the budget.

Senator O’Donnell asked whether the State Board of Examiners was taking funds out of the current year’s budget. Mr. Roberts answered the board would move funds from next year’s budget.

Senator Neal wanted an explanation of MAXIMUS and when the contract expires. Mr. Roberts replied the contract expires June 30, 1999. He explained MAXIMUS is an organization with which the state entered a contract to find revenue initiatives and additional revenue through productivity and different sources to bring more funds into the state. He said the state asked MAXIMUS to find an additional $500,000, with the first $500,000 located to be placed into the budget for alcohol and drug abuse programs. Senator O’Donnell clarified the funds are derived from grant funds.

Mr. Johnston noted section 5 of A.B. 181 indicates the bureau shall require requests for proposal (RFPs) for facilities for comprehensive evaluations of adolescents for substance abuse or mental illness or both. He voiced concern regarding the language because he said it would put into statute a requirement to prepare RFPs for adolescent facilities, "but there is no requirement to require the same service for adults." He worried that if the funds do not become available, BADA would be asked to provide the services by taking the funds from another source.

Senator Neal asked how much MAXIMUS is paid for their service’s. Mr. Roberts responded MAXIMUS works on a contingency and are paid 9 percent of all new or additional revenue they find. He explained they actually go to the agencies and investigate eligibility, how funds have been earned in the past, and what mechanisms are used to earn the funds, and then they attempt to create a way in which to bring in enhanced or additional funding.

May S. Shelton, Lobbyist, Nevada Association of County Welfare Directors’ Director, Washoe County Social Services, voiced support for A.B. 181, explaining her department has clients who would be able to access substance abuse programs. She said many are frequently dually diagnosed.

Denise Everett, Advisory Board on Certification of Alcohol and Drug Abuse, commented A.B. 181 calls for an internal state board. She said the advisory board approved the restructuring to serve in the capacity of an internal state board.

Speaking for herself, Ms. Everett asserted it makes "systemic sense" to transfer BADA to the Department of Human Resources.

There being no further testimony, Senator O’Donnell closed the hearing on Assembly Bill 181 and opened the hearing on the first reprint of Assembly Bill 285.

Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources, pointed out there were a number of people present who would like to testify in support of A.B. 285. She said most of the bills regarding Lake Tahoe that have been presented during the session have concerned costs to be incurred by state agencies. She declared, "This is the big bill. This is the bill that actually makes the state commitment to implement the environmental improvement program of the Tahoe Regional Planning Agency over a 10-year period." She noted it is already the second year of the 10-year period in which the state has been working on environmental concerns for the Tahoe Regional Planning Agency (TRPA) program.

Ms. Wilcox acknowledged the published plan for the 10-year program is "voluminous" and copies are rare. She offered to lend her copy to anyone who would like to review the volume.

Ms. Wilcox reminded the committee of the visit to Lake Tahoe by the President and Vice President 2 years ago at which time federal, state, and local officials as well as people from the private sector made commitments to work together to implement the environmental improvement program.

Ms. Wilcox provided a handout (Exhibit K) and drew attention to the second bulleted item that shows estimated costs for implementation of the environmental improvement program (EIP) over the next 10 years. The total cost will be $906.8 million, with Nevada’s share estimated at $82 million. She recalled the information was presented during the interim to the TRPA oversight committee, and A.B. 285 is the resulting product of work on TRPA by both the administration and the legislative oversight committee.

Ms. Wilcox explained that of the $82 million, $25.6 million is already available, primarily from the $20 million Tahoe bond act that was passed by the Legislature in 1995 and by the voters in 1996. She noted another $56.4 million is needed to complete the program and meet the commitment. She stated A.B. 285 makes the commitment by authorizing the Division of State Lands to request funds from either direct appropriations or, should that not be possible, from general obligation bonds. She said the funds will be requested each biennium until $56.4 million is provided.

Ms. Wilcox requested $3.2 million in bonds be approved this biennium to conduct environmental improvement projects within the Lake Tahoe Nevada State Park. She noted the Division of State Parks is not an authorized recipient of the bond act that was passed in 1996, and those funds will be expended for other agencies.

Ms. Wilcox provided a summary of environmental improvement projects for the Lake Tahoe basin (Exhibit L). She indicated the funding for the projects is outlined in Exhibit K along with a bar chart showing estimated annual and cumulative expenditures.

Senator Coffin recalled there had been a dispute when a bill was presented to the Senate Committee on Natural Resources giving Ms. Wilcox the authority to act as a liaison between the federal government and the state for the funds for the Lake Tahoe EIP, and many protests were received from Lake Tahoe property owners. He voiced concern whether the property owners will continue to "keep dirtying the lake." He said, "Because the lake’s deep it could almost hold all the money that we’ve poured into it, or will, including the lawyers’ pockets." He wondered whether $56 million will seem like sufficient funding in another 5 or 6 years. He opined it may require 2 to 3 times as much money to do the job. He asked whether local property owners have accepted any kind of trade to ensure cooperation.

Ms. Wilcox pointed out Exhibit K shows a request for a private commitment of $152.5 million. She said a large educational effort called the "Backyard Conservation Program" is under way to ensure private property owners understand what will be required of property owners in order to make the effort a success.

Ms. Wilcox asked to put in context the comments made in the natural resources committee hearing. She stated the comments were not made by Lake Tahoe property owners but by the state realtors’ board, which has concern regarding property rights. Ms. Wilcox declared most property owners in the basin are very supportive of the program and are acting as partners in the program.

Senator Coffin asked how much of the program is mandatory and how much is voluntary. Ms. Wilcox referred the question to the TRPA, although she acknowledged some of the program will be mandatory. She agreed property rights "are just as important in the Tahoe Basin as anywhere." She declared the property owners will have to take responsibility for taking care of their own land in a way that will protect the lake.

Ms. Wilcox pointed out the state has been in the process of purchasing sensitive properties around the lake from willing sellers who cannot build, and since the program began in 1987 property values have continued to climb. She asserted that by protecting the lake through various programs the value of property has increased and the state is obliged to spend much more for purchases. Senator Coffin countered, "As long as they help pay their share of what we’re doing for them, because, while Tahoe belongs to all of us . . . those who own the land have the greatest benefit from it."

Senator O’Donnell remembered that when the President visited the basin in 1997 prior to the election, many people were under the impression he intended to make an appropriation for the lake in order to save it. He noted the bill that came out after the election says the people of Nevada are supposed to pay $82 million, and he questioned the participation of the federal government. Ms. Wilcox noted the federal government is expected to appropriated $296.8 million, and the President committed the first $50 million of the total. She said California Senator Diane Feinstein has indicated she will introduce a bill in Congress to make a commitment to the Tahoe Basin.

Senator Raggio returned to resume his role as chairman of the committee and asked for a brief update. He opined the initiative is "an outstanding idea," but expressed concern that the 1997 Presidential Forum committed Nevada to provide $82 million. He questioned who represented the State of Nevada in making that commitment other than Governor Miller, noting the Legislature was not a part of that forum and was not invited to participate although the burden to appropriate the funds is up to the Legislature. He asserted it was an error to exclude the people of the state from participating in that decision.

Ms. Wilcox reiterated A.B. 285 is the joint product of the administration and the legislative TRPA oversight committee. Senator Raggio repeated his concern the commitment was made with no input from members of the Legislature or the people.

Ms. Wilcox explained the provisions of A.B. 285, saying it spells out the events being discussed and will authorize the Division of State Lands to coordinate the development and implementation of the program. She noted section 1, subsection 2 provides for the state to expend no more that $56.4 million over a 10-year period ending in the year 2007.

Ms. Wilcox suggested her division and the Budget Division have developed a cost-effective method to accomplish the goals of A.B. 285. She reiterated the bill asks for funds from either direct appropriations or bonding, and it requires that any appropriation by the Legislature or funds from other sources be used to reduce the amount of funds derived from bonds. She explained there are a number of state funds available, such as State Highway Fund dollars, and bonding will be looked upon as a last recourse.

Ms. Wilcox said the funding will be handled in a manner similar to all capital improvement project (CIP) bonds. She stated the schedule for funding will be developed and submitted by the Division of State Lands.

Senator Raggio inquired how bond debt will be serviced. Ms. Wilcox replied the debt will be serviced out of the ad valorem tax rate as are all other general obligation funds. She reported the Budget Division told her it was included in projections and the 15-cent rate will not have to be increased.

Senator Raggio asked whether the debt service in A.B. 285 is part of the CIP actions taken by the joint subcommittee. John P. Comeaux, Director, Department of Administration, responded it is and the bonding information provided to the subcommittee included $13.2 million for Lake Tahoe bonds, which included the remaining $10 million approved by the voters plus $3.2 million as the first installment of the authorization provided in A.B. 285. The $3.2 million, he explained, is part of the $82 million share from Nevada. Mr. Comeaux said the remaining bonding authorization will be utilized in subsequent biennia if necessary.

Senator Raggio asked when the $82 million commitment will have to be provided. Ms. Wilcox replied it must be accessed between now and 2007. Senator Raggio wondered whether the provisions of A.B. 285 will take precedence over other appropriations if the bill is passed. Mr. Comeaux replied that is not the intention. He explained that because there is no extra cash this year, and the bonding capacity is limited, the administration requested the Division of State Lands make the lowest possible proposal this biennium. He reiterated it was not the intention of the administration that the funds take priority over other state matters.

Senator Raggio asked, "Is there anything in this bill, or in any other understanding, that would require these bonds, or the amount that’s obtainable from these bonds, to be given a preference over other needs of the state?" Mr. Comeaux replied, "No, sir. There is not. They would be in line with everything else."

Senator Raggio asked, "That is subject to both executive request and legislative approval?" Mr. Comeaux answered, "Yes, sir. That’s correct." Senator Raggio declared, "We don’t want to send any mixed signals out of here." He opined it would have been helpful had the Legislature been involved in the construction of the proposal. Mr. Comeaux voiced agreement. Senator Raggio averred it is necessary for the Legislature to know what it is doing, and the manner in which the measure came about was unfortunate "when the Legislature was left out of the process and when there are other state needs." He repeated, "We want to make sure we’re not precluding ourselves from addressing other responsibilities."

Senator O’Donnell interjected it appears the first $50 million has already been allocated from the federal government, and $82 million will be provided over a period of 10 years. He asked what happens if the federal government does not provide the remainder of its commitment and whether there is any mechanism in A.B. 285 to reduce the commitment of Nevada predicated on the federal contribution, and whether California will be obliged to approve its share. Ms. Wilcox responded:

Ms. Wilcox continued:

Senator O’Donnell wanted to know how the California commitment is coming. Ms. Wilcox responded that to date it has been made out of General Fund appropriations at a rate of $20 million a year since the summit meeting was held. She reported California passed a bond issue at the same time Nevada did, and there has been consideration of another Tahoe bond issue.

Senator Raggio asked for a copy of the memorandum of agreement referenced in A.B. 285. Ms. Wilcox offered to provide it. Senator Raggio responded that if the memorandum of agreement binds Nevada to the initiative, the Legislature may have very little authority to determine when the bonds may be issued. Ms. Wilcox assured Senator Raggio that no dollar amounts are cited in the agreement.

Senator Raggio pointed out that once the Legislature passes the measure it will be irrevocably bound to issue the bonds. He reiterated the need to know what is in the memorandum and what kind of commitment is included, and what may happen if funding from other sources does not materialize.

Ms. Wilcox continued her explanation of the bill, saying section 2 creates the fund and provides that interest will accrue to the fund, that the fund may be used for administrative expenses, and that the Division of State Lands report to the Interim Finance Committee (IFC). She said the State Board of Finance will approve the issuance of bonds.

Calling attention to the fact many of the projects listed by Ms. Wilcox in her handouts (Exhibit K and Exhibit L) started around 1969 and continue with a "wish list," Senator Jacobsen asked Ms. Wilcox to develop a priority list for the Legislature. He expressed approval that many projects have gone beyond the planning stage and are under way. He hoped a summit meeting could be held between members of both the California and Nevada Legislatures.

Ms. Wilcox responded California and Nevada have been coordinating activities closely on an agency level, and she agreed it would be valuable to have the two Legislatures more involved. As to priorities, she said Exhibit L is a priority list from the Division of State Parks, and the Nevada Department of Transportation has a priority list.

Steve Weaver, Chief of Planning and Development, Division of State Parks, explained Exhibit L is a priority list of the $14 million total of state park projects. He said the request for $3.2 million over the next biennium should be sufficient for the first 11 projects, which are outlined on page 1 and through the third item, Habitat Restoration, on page 2. He said two of the projects will not need bond funds, but nine will require bond funds for part of the project funding.

Pam Drum, Public Affairs Coordinator, Tahoe Regional Planning Agency, urged support of A.B. 285. She praised those who have been involved in the Tahoe Basin project for demonstrating "extraordinary cooperation." She exclaimed Nevada has shown great leadership. She declared California and the federal government have upheld their portion of the project, and passage of A.B. 285 will demonstrate the leadership of Nevada is undertaking a comprehensive approach to the problem.

Regarding Senator Coffin’s comments regarding the contribution of private property owners at Lake Tahoe, Ms. Drum spoke for the record, saying:

Ms. Drum continued:

Senator Raggio asked how the requirement for local government to provide $100.9 million and for "private people" to provide $152 million is going to be achieved. Ms. Drum responded TRPA is working with the local business community and various organizations such as the League to Save Lake Tahoe. She said an RFP has just been issued for an economic analysis of the impact on the regional economy at Lake Tahoe "from generating an additional $200 million." She explained $100 million will be required to take care of the local government obligation under the EIP for capital projects. She indicated those will include infrastructure, such as curbs and gutters, erosion control, and other projects by local governments which will provide the match to the state’s $82 million.

Senator Raggio reiterated the need to see the agreement. Ms. Drum responded those items are not necessarily in the agreement between the two states. She said every project is outlined in detail within the environmental improvement program plan itself, the large document Ms. Wilcox showed the committee earlier.

Senator Raggio noted there is a reference to a memorandum of agreement signed in October 1997 in the bill between the Federal Interagency Partnership on the Lake Tahoe Ecosystem, Nevada and California, the Washoe Tribe, the TRPA, and interested local governments. He stated he wants to see that agreement. Ms. Drum said the agreement makes reference to the EIP, but it does not contain the detail. Senator Raggio asked whether local governments and private entities make in-kind contributions according to the agreement. Ms. Drum responded they will, and the entire EIP for Lake Tahoe amounts to approximately $908 million. She said that has been broken down into areas of responsibility, and of the total it was determined that $82 million is Nevada’s obligation and $101 million is designated as local government obligation.

Ms. Drum said work is going on at the regional level to develop a new revenue stream "that will affect property owners as well as visitors to satisfy the local government obligation under the EIP."

Senator Neal asked why revenue bonds for the EIP were not sought for local governments as well as the other entities involved. Ms. Drum responded revenue bonds have been approved by voters at the statewide level, including $20 million approved in Nevada in 1996 and $10 million approved in California in 1996. Also, she said, local governments are being solicited for funds, but they cannot use the bond approach.

Senator Neal responded the federal law allows the revenue bonds to be resold for the purpose of expansion or acquiring land. He asked whether that was considered. Ms. Wilcox stated she is not aware of any revenue source that can be used to secure revenue bonds for the state’s portion of the obligation.

Senator Neal suggested the Division of State Lands take another look at the possibility. Ms. Wilcox asked when the federal law was enacted, and Senator Neal replied it was passed in 1997.

Rochelle Nason, Executive Director, League to Save Lake Tahoe, identified the league as the principal environmental organization for the Tahoe Basin. She said she also was speaking on behalf of the Tahoe Transportation and Water Quality Coalition, which is a coalition of environmental, business, and property-rights organizations throughout the basin, including all the local chambers of commerce. She offered strong support for A.B. 285 and assurances that the league and the coalition are working very hard at every level to see that all parties participate fully in the EIP and that all the funds committed are secured in a timely way.

Senator Raggio asked whether Ms. Nason could comment on the requirement that $152.5 million come from the private sector. Ms. Nason responded there are many projects pending in the basin that are primarily privately funded and are important parts of the effort to achieve and maintain the EIP. As an example, she said the Heavenly Resort is building a new gondola to replace the existing tramway so that people will be able to go from the main hotel area to the ski area without driving and creating traffic. She said such projects are considered at their value to the extent that they contribute to the achievement and maintenance of the thresholds.

Susan Martinovich, Assistant Director, Engineering Division, Director’s Office, Nevada Department of Transportation, testified the department is in support of A.B. 285. She asserted the department has been successful in partnerships with TRPA and all the agencies at Lake Tahoe in reducing and improving water quality. She mentioned the department recently won a federal award for its water quality efforts.

Ms. Martinovich said the department is constantly seeking additional federal funds through public lands, highways, or forest highways for work in the Tahoe Basin.

Senator Raggio noted the handout from Ms. Wilcox indicates the Nevada Department of Transportation (NDOT) is committing $10,050,000 in NDOT funds for CIPs as a match for existing Tahoe bond funds approved by the voters in 1996. Ms. Martinovich added federal funds are also sought to match state funds.

Senator Raggio asked why those funds are not credited to the state as part of the $82 million commitment. Ms. Wilcox replied that is one of the other sources of funds. She pointed out the state is only authorizing $56.4 million and will be credited with the funds from other state sources. She said federal dollars cannot be counted against the Nevada share, but any state funds from any source can be credited.

Kay Bennett, Carson City Supervisor, Tahoe Regional Planning Agency Governing Board, noted she chairs the Nevada-Tahoe Conservation District, which works very closely with private-property owners. She said the conservation district urges private-property owners to adopt conservation measures.

Ms. Bennett said there has been a tremendous amount of redevelopment going on through the private sector, and environmental improvements have been made with those projects. She cited the Heavenly Valley project as an example, and another is the golf course project at South Lake Tahoe. She urged support of A.B. 285.

In the absence of further testimony, Senator Raggio closed the hearing on A.B. 285 and opened the hearing on Assembly Bill 288.

David Pursell, Executive Director, Department of Taxation, explained A.B. 288 is a request to adjust the collection fee on certain taxes that the department collects and distributes to local governments. He reported that during the development of The Executive Budget the department was asked to analyze the amount currently being collected. During this fiscal year 1 percent is being collected and distributed to the state General Fund. He noted effective that July 1, 1999, that will be reduced to .5 percent, and A.B. 288 requests the percentage be raised to .75 percent.

Mr. Pursell noted section 1 of the bill addresses the local school support tax revenues, section 2 addresses the basic city-county relief tax and the supplemental city-county relief tax, and section 3 addresses various optional taxes involved. He distributed copies of an analysis (Exhibit M) showing the total estimated budget for the Department of Taxation for Fiscal Year (FY) 2000 at $15.4 million and FY 2001 at $15.8 million. He explained the calculations of the costs to collect and distribute the taxes and technical support to the local governments. He noted that will result in an actual cost to the department of $11.6 million in the first year of the biennium and $11.8 million in the second year, which is built into the budget.

Mr. Pursell explained the commission structure set forth in the middle section of Exhibit M. He indicated setting the commission rate at .75 percent would bring it more into line with the actual costs related to the taxes. He said for the biennium it would add $7.3 million to the General Fund. Senator Raggio observed the proposal was originally made in January and said the counties that will be affected should have had an opportunity to include the .25 percent raise in their budgets.

Thomas J. Grady, Lobbyist, Nevada League of Cities & Municipalities, recalled that two sessions ago, when the fee was raised from .50 percent to 1 percent to balance the General Fund budget the increase had no bearing on the cost of collection. He remembered that last session the league and the counties stated a preference for using an actual figure rather than a budgeted figure. He said the league still feels .75 percent is too much and questions whether it actually costs $15 million for 72 percent of the time of 200 employees and why the cities must pay 72 percent of the total budget. He indicated the agreement reached was to use actual costs.

Mr. Pursell responded that time for the Nevada Tax Commission to hear appeals and for the State Board of Equalization to hear property tax protests is included in the cost to collect and distribute the taxes. He explained it is not just a matter of entering data into the computer, "but there are other administrative costs for the appeal process included."

There being no further testimony on the matter, Senator Raggio closed the hearing on A.B. 288 and opened the hearing on Assembly Bill 321.

Lorne J. Malkiewich, Director, Legislative Counsel Bureau, noted the requested appropriation for software and equipment for the information systems unit is included in a separate bill each session because the cost varies based on needs. He said the request for the coming biennium is $874,000, and is included in The Executive Budget.

Allan M. Smith, Manager, Information Systems, Legislative Counsel Bureau, drew attention to major items listed on a handout delineating the requests in the computer projects appropriation (Exhibit N). He said the upgrade for the existing telephone system falls in line with that being installed at the Executive Branch. He explained it was determined more control is needed on the addition and removal of telephones and the level of security. He said it was learned anyone with an administrative account could access legislative information.

Mr. Smith said the next large item relates to information on the Internet for the reapportionment process that is to take place during the 2001 Legislative Session.

Senator Raggio asked what the front desk upgrade will entail. Mr. Smith replied both the Senate and Assembly have requested improvements in the user interface as well as some issues regarding the speed of the voting system. The requests will include costs for underlying software and contracting for its development.

Senator Raggio inquired about the issue regarding codification of the Nevada Revised Statutes (NRS). Mr. Malkiewich responded that although the bills are on the computer, Nevada lacks the ability to automatically include bills in the appropriate sections of the NRS. He explained the new application will include changing italicized language to regular language, deleting bracketed language, and preparing updated sections. He said many states have systems that do automatic codification. He said the Legislative Counsel Bureau LCB) hopes to have the new NRS on people’s shelves by October 1, after "this early session."

Senator Neal asked why it is necessary for legislators to have a stand-alone telephone system. Mr. Smith responded the LCB proposes to add a stand-alone control unit for the telephone system within the Legislature. He explained that in a sense it will isolate the Legislature, but the system will be part of the overall state system. He reiterated it is possible for a person with an administrative account to listen to voice mail for any legislator, and the ability to quickly add or remove telephones throughout the building has been impaired. He pointed out it is important to have the ability to build up and remove phones quickly for legislative sessions.

Mr. Malkiewich clarified the system will be a stand-alone system "rather than go through the Department of Information Technology [DoIT]." He said that at present the Legislature must rely upon DoIT for any changes in the phone system. He stated changes are needed changes to interface with the updated new changes for the rest of the state offices. Mr. Malkiewich pointed out two members of the Senate Committee on Finance are on the Subcommittee on Computer Applications to the Legislative Process (SCALP) that reviews and monitors the projects through the interim.

Senator Raggio wondered whether it is imperative to upgrade the telephone system right now, or whether it could be postponed. Mr. Malkiewich responded it is his understanding there is a need to make the change fairly soon because the system is changing all around the state. He said he would check to determine whether it may be possible to put off the project for another 2 years. He noted the LCB anticipates using the staff for much of the wiring in order to save cost.

Mr. Smith said the lines used through DoIT for Internet connectivity are not related to the proposal, nor is the connection to Las Vegas for the systems hookups. He explained the upgrade project is solely for the telephone system.

Senator Jacobsen asked whether the rural areas will be able to hook into the system for the reapportionment project. Mr. Smith responded they will, and following the last legislative session a number of rural areas hooked into the system to develop precinct maps. The service will be offered again.

There being no further testimony on A.B. 321, Senator Raggio closed the hearing and opened the hearing on Assembly Bill 344.

Rick Gimlin, Administrative Services Officer, Division of Agriculture, Department of Business and Industry, reported the division is requesting $13,374 as a supplemental appropriation to cover the anticipated shortfall in seasonal salaries and to reclassify one position. He explained the shortfall is the result of a mechanical problem during the last biennium.

In the absence of further testimony on the bill, Senator Raggio closed the hearing and opened the hearing on Senate Bill 321.

Senator Raggio asked why no fiscal note was attached to the bill. Steven Barr, Lobbyist, Nevada Corrections Association, said he provided some fiscal information to the fiscal staff. He noted The Executive Budget originally requested $4,022 each year. Senator Raggio stated his information is that more than $680,000 is requested for the first year and over $638,000 the second year. Mr. Barr said there was a fiscal note prepared in September and a second fiscal note prepared recently by John Slansky, the Assistant Director/Operations in the Department of Prisons.

Senator Raggio said it is very unlikely the bill can be processed unless information is provided explaining whether there is any change in the fiscal note and what it is. He asked Mr. Barr to come back to the committee with the information.

Senator Raggio reported he had been advised by the staff that Amendment No. 1035 has come back for S.B. 511. He noted there had been a determination on May 17 to amend and do pass with an amendment to "sunset" the expenditures on the pollution control account.

Senator Raggio asked the committee to look over the amendment. The committee was satisfied with the amendment and no objections were voiced. Senator Raggio opened the hearing on Assembly Bill 525.

Assemblyman David E. Goldwater, Clark County Assembly District No. 10, stated he is one of several sponsors of A.B. 525, which was a legislative priority of Assemblywoman Jan Evans, (currently ill). He said he commenced working with Ms. Evans on the bill several weeks prior to the session. He noted the bill started in the Assembly Committee on Taxation, was approved in the Assembly Committee on Ways and Means, and passed unanimously on the floor of the Assembly with no amendments.

Mr. Goldwater read the testimony given by Ms. Evans in the Assembly:

Mr. Goldwater noted Ms. Evans has served seven terms. He continued reading:

Mr. Goldwater interjected, "If any of you have not read that report, I offer editorial comment. It is required reading, in my opinion." He continued reading:

Mr. Goldwater concluded, "That’s the bill."

Senator Raggio commented:

Mr. Goldwater responded the Assembly asked the same question, and Mrs. Evans had a very good response. He indicated it touched on two issues. He said:

Mr. Goldwater invited comment from Dan Miles, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. Mr. Miles responded:

Senator Raggio remarked, "That’s the second part of my question: Why do we have to go through setting up a whole mechanism of this kind? If we just added a position with that kind of capability, don’t we get the same result?"

Mr. Goldwater replied:

Mr. Goldwater indicated he was asking similar questions of the Economic Forum. He said he felt the forum was a well-conceived revenue-projector and he proposed this could be an adjunct to that in an effort to produce the longer-term forecasts. He reported, "Ms. Evans feels every entity has a different mission, referring to the proposed office having its own mission, and she would foresee that the Economic Forum would utilize the work and findings of the new office, as would the fiscal staff."

Mr. Goldwater read from Ms. Evans’ testimony: "The long-term is not only going to be looking down the road to the horizon, and clearly they need to know what is happening today, and what we will be seeing in the next year and the year after that."

Mr. Goldwater explained Ms. Evans felt all those people would complement one another and would work in concert "so that everyone can do their best job."

There was no further testimony on A.B. 525. Senator Raggio opened the hearing on Senate Bill 279.

Senator Raggio commented there is an appropriation included in The Executive Budget for Project Genesis, but it may need an amendment to approve a carry-forward. Mr. Miles indicated that at the time of the hearing in April, it was requested that the current biennial appropriation be carried forward for Project Genesis to extend the reversion date. He noted the funds normally would revert on June 30, 1999.

Mr. Miles added the department sent a letter requesting a reduction in the amount of the appropriation. He explained the department proposed reducing the amount from $8,631,993 to $7,707,993. He said future one-shot contracts of $1,600,000 each year with the consultants for the department had been reduced to $676,000 as the firms are phased out by the end of the coming biennium.

Senator Raggio asked whether the committee wished to amend the bill.

Senator Raggio opened the discussion of Senate Bill 280.

Senator Raggio noted the bill was heard on April 22. Mr. Miles reported that at the hearing the fiscal staff and the department were directed to count the number of units that will be required, to review the floor plans, and to determine whether funding sources other than the Highway Fund would be appropriate to use. He said there are some units that will be assigned to emission control, dignitary protection, motorcycle safety, bicycle safety, and the Office of Traffic Safety which are not normally funded through the Highway Fund.

Mr. Miles suggested the Highway Fund appropriation be reduced by taking out those units which can purchase their own furniture. He said that if necessary they could process a work program with the IFC. He stated that with removal of those items, the total amount needed will be reduced from $1,236,788 to $1,185,476.

Mr. Miles acknowledged the agency has been involved in long-term remodeling and has been unable to provide actual counts and floor plans of the modular units for the major portion of the Department of Motor Vehicles and Public Safety (DMV&PS) building. He stated the east wing of the first floor has been completed and will require $304,481 for furnishings and equipment.

Mr. Miles suggested reducing the overall appropriation to $1.1 million and requesting the agency to return to the Interim Finance Committee (IFC) with final plans for funds above the $304,481 by including a Letter of Intent.

Senator Raggio turned to Senate Bill 305.

Mr. Miles reminded the committee Mr. Comeaux of the Budget Division had made a request that the bill be amended to extend the reversion date on the original appropriation passed during the last session. He said the bill included several projects, many of which are still ongoing, some of which will not be completed by the reversion date, June 30, 1999. He said Mr. Comeaux requested the reversion dates for Senate Bill 201 of the Sixty-ninth Session and Senate Bill 180 of the Sixty-ninth Session be extended.

Senator Raggio suggested Senate Bill 305 be amended if passed.

The next bill for consideration was Senate Bill 308.

Senator Raggio noted the appropriation is included in The Executive Budget.

Senator Raggio asked the committee to review Senate Bill 399, the small fiscal note attached to it, and Amendment No. 643.

Senator Jacobsen said the proposed committee is not an oversight committee to change policy or direction, but it will provide for legislators to periodically tour and review the correctional institutions. He suggested the legislative committee will be of merit by acting as a liaison group between the Legislature and the institutions. He explained the amendment adds to the duties, reduces the number of members, and changes the makeup of the committee.

Senator Neal asked why the Department of Prisons would have more than one representative on the committee. Senator Jacobsen replied the various people listed in the amendment often have different points of view.

Senator Raggio decided to hold the bill until the next day when the full Senate Committee on Finance would be present. He asked the committee to turn back to Assembly Bill 151.

The next bill brought forward for review was Assembly Bill 288.

Senator Raggio asked the committee to look at Assembly Bill 344.

The next bill voted upon was Assembly Bill 661, heard on April 26.

Senator Raggio presented Senate Bill 432 for consideration.

Senator Raggio announced the Distributive School Account would be heard in a joint subcommittee meeting later in the day. He asked committee members to inform him soon of any bills they would like to have heard. He adjourned the meeting at 10:55 a.m.

RESPECTFULLY SUBMITTED:

Judy Jacobs,

Committee Secretary

APPROVED BY:

Senator William J. Raggio, Chairman

DATE:

S.B.511 Revises provisions relating to expenditures for air quality